CiCM 31st August 2023

NEWS IN CHINA

Xi Jinping presided over a meeting to review cadre development plan: The Political Bureau of the CPC Central Committee held a meeting to discuss the "Regulations on Cadre Education and Training" and the "National Cadre Education and Training Plan (2023-2027)" under the leadership of Xi Jinping. Cadre education and training are seen as essential for building a high-quality cadre team and play a vital role in advancing socialism with Chinese characteristics and party building. To achieve this, emphasis was placed on implementing Xi Jinping Thought, understanding the importance of "two establishments," and strengthening the "four consciousnesses" and "two safeguards." The focus was laid on politically sound, adaptable, and capable cadres who can lead socialist modernization. The meeting stressed the importance of deepening the study of Xi Jinping's new era socialism and using innovative party theory. The meeting encouraged a Marxist study style that integrates theory with practice and discourages formalism, emphasizing efficiency in education. It advocated continuous political training for cadres throughout their growth cycle to cultivate the right perspective on power, political achievements, and career.

Report on China’s economic and social development plan predicts sustained economic recovery: A report presented to the 14th National People's Congress Standing Committee provided insights into China's economic and social development plan. The report highlights a 4.7 percent year-on-year increase in social logistics value from January to July, indicating the ongoing sector recovery. The software industry saw a 13.6 percent growth, while state-owned enterprises' income increased by 4.3 percent during the same period. Additionally, there was substantial growth in new business entities, successful IPOs, and stable foreign trade and investment. However, the report cautions that China's economic improvement is primarily due to the recovery process and emphasizes the need for structural changes like macroeconomic adjustments, domestic demand expansion, confidence building, and risk management for sustained growth.

China makes changes to housing credit policies: China's financial regulators have announced changes to housing credit policies, which include lowering interest rates on existing mortgages for first-home purchases. Starting from September 25th, borrowers with existing mortgages can apply to reduce their interest rates. This move is expected to decrease mortgage expenses, stimulate consumption and investment. Banks and borrowers will negotiate independently based on market principles and the rule of law to lower interest rates on existing housing loans. Additionally, there will be a uniform policy on minimum down payment ratios for both first and second-home purchases, set at no less than 20 percent and 30 percent, respectively, nationwide. Local governments can adopt housing credit policies as per specific city needs. These adjustments align with the Communist Party of China's and the government's call to optimize real estate market policies in response to market changes and diverse demands. Several Chinese cities have already implemented similar changes in housing credit policies, such as offering preferential loans for first-home purchases irrespective of borrowers' credit history.

China poised to bring new Regulations to strengthen governance: China is poised to introduce several new laws and regulations in September to bolster the well-being of its citizens, protect the environment and cultural heritage, in alignment with the country's commitment to rule-of-law based governance. Starting from September 1, a law ensuring a barrier-free living environment will take effect, aimed at upholding the rights of individuals with disabilities and the elderly to actively participate in society with equitable access. The law mandates that constructions and renovations of various facilities must adhere to barrier-free standards. Additionally, it addresses enhancing barrier-free services in medical care, social security, and financial sectors. Revised regulations governing legal aid case procedures will also become effective on September 1, streamlining application processes and preventing legal aid providers from taking money or property from aid recipients. Starting from the same date, regulations pertaining to consular protection and assistance will be implemented, specifying circumstances in which China's diplomatic missions would offer such services, and obliging issuance of timely safety warnings for citizens. Effective September 1, the law on ecological conservation on the Qinghai-Tibet Plateau will be enforced, prioritizing ecological protection and natural restoration. It outlines coordinated, scientific, and systematic management approaches, with emphasis on ecological risk prevention and controlling tourism and sports activities to avoid damaging the local environment.

China’s manufacturing PMI sees growth: China's manufacturing sector exhibited signs of further recovery in August, with the key gauge rising for the third consecutive month, according to official data. The manufacturing purchasing managers' index (PMI) for August reached 49.7, up by 0.4 index points compared to the previous month. This trend of sustained improvement in the manufacturing climate over three months reflects a stable recovery in China's economy. Out of the 21 industries surveyed, 12 reported expansions in August, suggesting ongoing progress in the manufacturing sector. The new orders sub-index increased for three straight months to 50.2, indicating growing demand, while the new export orders index also saw a positive turnaround after five months of decline. This upswing in demand underscores the strengthening internal momentum of economic growth, noted experts. However, the figure struggling to breach the 50-point mark remains a cause for concern.

Huawei’s surprise launch of Mate 60 pro smartphone raises speculations: Huawei's recent launch of its Mate 60 Pro flagship smartphone has sparked speculation due to the company's silence regarding the advanced chip powering the device. Released on the background of strict US sanctions, Huawei has not disclosed details about the processor or whether the phone supports 5G networks. Chinese benchmarking website AnTuTu conducted tests and identified the CPU as the Kirin 9000s from Huawei's chip design unit HiSilicon, which supports 5G connectivity and artificial intelligence applications. Although the information could not be independently verified, this deliberate silence illustrates Huawei's efforts to revive its smartphone business despite US sanctions. This launch has prompted market speculation and increased interest in the technology behind the device.

Wang Yi met UK foreign Minister in Beijing: China’s Foreign Minister Wang Yi met James Cleverly, the visiting UK's Secretary of State for Foreign, Commonwealth and Development Affairs, in Beijing on 30^th August, 2023. This marks the first time since 2018 for a UK foreign secretary to visit China. The pandemic, UK’s criticism of China over human rights abuses, and the situation in Hong King has damaged the relationship significantly. Cleverly was on a one-day trip to make headways towards amending those ties. Cleverly expressed that a positive UK-China relationship is advantageous for both nations and the world. He confirmed that the UK's position on the Taiwan question remains unchanged, adhering to the one-China policy. Cleverly stressed the UK's commitment to enhancing communication, overcoming challenges, promoting understanding, and pursuing opportunities in collaboration with China. He also mentioned British enterprises' eagerness to deepen cooperation with China and explore its market. Wang emphasized on China's regard for the UK as a significant global power and highlighted China's commitment to maintaining stable and mutually beneficial relations. Wang underlined that China and the UK should collaborate as major countries to address global challenges, ensure world peace, and progress their relations.

SOCIAL MEDIA CHATTER IN CHINA

Japanese restaurant in Shanghai faces backlash over anti-radiation meal: A Japanese restaurant in Shanghai faced backlash and removed an "anti-radiation" set meal from its menu after netizens questioned its validity. Users on social media criticized it for false advertising and further taking advantage of public anxiety over the nuclear discharge by Japan. One user noted the exploitative nature: “of course the next step is to make a quick buck by pushing anti-radiation products.” The promotion claimed that certain dishes had radiation-proof properties, citing trace elements and health benefits. However, there was no scientific basis for these claims, and they were based on the chef's selection of ingredients post-Japanese nuclear-contaminated wastewater dumping. The meal was quickly removed from the menu after the issue gathered steam on social media platforms with over 140 million views.

INDIA WATCH

India and the UK are moving closer to finalizing a free trade agreement (FTA), along with revising their bilateral investment treaty (BIT). The existing model BIT mandates exhaustion of domestic remedies before initiating international arbitration, a provision likely to be adjusted in the revised version. The change in the model BIT is prompted by past investor-state disputes, such as those involving Vodafone and Cairn against the Indian government. The FTA negotiations have closed 19 out of 26 chapters, with both countries expressing confidence in resolving outstanding issues in the upcoming rounds. By entering into FTAs and BITs with each other, they can open up new trade and investment opportunities that were previously dominated by China. An FTA would provide Indian businesses with greater access to the UK market and vice versa. This access can help both countries tap into new consumer bases, expand their exports, while BITs can encourage more cross-border investments between India and the UK. This can benefit both countries by attracting foreign direct investment (FDI), creating jobs, and fostering economic growth. While reducing dependency on China is a common goal, both India and the UK can benefit from balancing their economic interests with various partners. Diversifying their economic relationships can provide more flexibility in pursuing their respective economic and strategic goals. The increasing trade deficit has both countries working towards ways to reduce their dependence on China especially in the manufacturing sector. UK’s trade deficit with China tripled in the financial year from 2021 to 2022, while India’s trade deficit hit 100 billion dollar for the first time while overall trade has seen some slowdown.

Prepared By

Alok Kumar Chaurasia

Alok has recently finished his M. A. In Politics with International Studies from Jawaharlal Nehru University. He is currently a China Studies fellow at Takshashila Institution.